Echo to sell Townsville casino for $70m

Echo Entertainment chief John Redmond...“Given the scale of operations and the size of the local market, we saw more limited expansion opportunities, and therefore strategic fit, with the group’s other assets.”
Photo: Peter Braig

Mr Redmond said despite “positive" performance at the Townsville casino, the company’s smallest property was not a natural fit with Echo’s two other Queensland casinos in Brisbane and the Gold Coast, and its flagship property The Star in Sydney.

“Given the scale of operations and the size of the local market, we saw more limited expansion opportunities, and therefore strategic fit, with the group’s other assets," Mr Redmond said.

“We remain committed to and excited about investment in South-East Queensland and believe the company’s capital will be better deployed as we advance our plans for development of both Jupiters Gold Coast and Treasury Brisbane into large-scale integrated resorts."

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Echo said it would book a pre-tax profit of $8 million on the sale of Jupiters Townsville after transaction costs. The company said the $70 million price tag represents a multiple of 10 times actual earnings before interest tax, depreciation and amortisation in the 2013 financial year including corporate cost allocations for the property.

CLG is an Australian company that operates 15 hotels in Victoria and Western Australia, a brewery in Margaret River, WA and a portfolio of assets in Northern Queensland.